What Can The Electronics Industry Expect From Brexit?

Posted on January 18, 2017 by Ross European flags in BrusselsBritish tech companies and electronics manufacturers face a number of opportunities and threats in the near and long term future. Since the Brexit vote the electronics sector, as well as the economy more generally, has performed better than many economists predicted. Now, after Theresa May has put a little more flesh on the bones of her Brexit plan, what should we expect going forwards? More orders Earlier this month the UK Manufacturing Purchasing Managers Index (PMI) for December rose to 56.1, posting the strongest reading since June 2014. Up from 53.6 in November, the value exceeded everybody’s expectations. The increase was fuelled by new orders from domestic and overseas clients. Strong production gains were registered across the consumer, intermediate and investment goods industries, according to the Markit report. Overseas sales are driven in a large part by the changing value of the pound, which has been a feature of the post-Brexit period. Against the Euro, the Pound has been trading considerably lower than its pre-Brexit level. In January, the currency hit a fresh floor before rallying on the Prime Minister’s speech yesterday. Of course, UK companies’ ability to trade across international borders will probably be affected after Britain leaves the EU. At the moment, the EU is Britain’s biggest trade partner and at this stage, it is difficult to imagine any trading arrangement that will boost trade with the EU rather than worsening the situation. On the other hand, Britain will be more free to trade with other countries around the world. This will be one of the key debates to unfold throughout the negotiations with the EU.

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